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U.S. government says it's not responsible for full accounting of trust fund

WASHINGTON - Lawyers for the federal government argued before a three-judge federal appeals panel that the government should not be required to fully account for the assets of nearly half a million American Indians.

The government claims that U.S. District Court Judge Royce Lamberth overreached his authority when he ordered a full account of Indian trust funds and appointed himself overseer of trust reform efforts in the on-going case, Cobell v. Babbitt. Arguments before the panel began Sept. 5.

"It is unclear what the law was before 1994," said David Shilton, lead trial attorney for the federal government. "The court does not have the authority for judicial supervision in this case or the authority to force full accountability. Congress did not allow for this kind of cause of action."

The government is appealing Judge Lamberth's ruling based on the Justice Department's position that the decision goes beyond the scope of the law and the intent of Congress. However, one judge was quick to point out that as trustee the government does have a responsibility and an obligation to account for the funds it manages.

"Certainly there was a right to account for these people's assets which the government is responsible for," said Judge Sentelle. "If they can get an injunction why can't they get an accounting?"

Under Judge Lamberth's ruling, the Department of Interior would be required to file quarterly reports with the court for at least five years while the department continues the trust reform process. Although officials for the departments of Interior and Treasury said the judge's decision was justified and that "court supervision actually helps," Justice filed for appeal in January.

"They've done such a horrible job in providing any kind of information," said Elouise Cobell, lead plaintiff in the case. "They don't even know what an account balance is. They don't even know what to send to individual Indians. I think it would shock any Indian person to hear that they didn't have any rights prior to 1994. Any citizen of the United States would be shocked."

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In 1994, Congress passed the Indian Trust Fund Management Reform Act in an attempt to begin to rectify these long-standing problems. The 1994 Act, among other things, created the Office of the Special Trustee for American Indians and the Advisory Board on Trust Fund Management Reform. It was expected that the special trustee would create an accountable system by implementing the reforms necessary for the proper discharge of the secretary's trust responsibilities to Indian nations and people.

Cobell, along with a group of other Indian plaintiffs, initiated a class action lawsuit in 1996 to force the federal government to account for billions of dollars in unreconciled tribal trust funds and individual Indian monies. Attorneys for the government argue the law is unclear before 1994 and the government should be able to move forward with reforms without judicial oversight. Cobell believes that the government is still not doing its job and needs supervision.

"I think the federal ruling was just what the doctor ordered because it brings in oversight and without oversight the system will only go back to the status quo," Cobell said. "I was very happy to hear the judges talk about the rights of the beneficiaries."

Cobell and her attorneys say the federal government is ignoring the facts and the law, forgetting that the government has been trustee for more than 100 years and is required by common law to account for all of the funds it managed.

"That's the position of the government," said Denis Gingold, attorney for the plaintiffs. "The trust beneficiaries have no rights. They tried to argue that they have no responsibility and they can steal the money and the land and the trust beneficiaries have no recourse."

Gingold says they are in the process of preparing further contempt of court motions. The three-judge panel is expected to reach a decision on the government's appeal sometime this fall.

The federal government holds approximately $450 million in nearly 500,000 individual trust accounts. There are reportedly no records for more than $100 million. In tribal trust accounts overall, $2.4 billion remains unreconciled.